One of the factors that retain your motivation to continue working is the pension fund you contribute to. A pension fund is an amount getting accumulated on your behalf, which you receive in the form of periodic payments when you retire. Unfortunately, malpractice and fraud are much more common in this area than one would like to believe.
There have been cases that caused individuals to lose their pensions. It’s only natural to be concerned if you’re also about to step into the post-retirement world. Fortunately, there are services where you can getclaimsadvice and learn how to deal with issues related to pension claims, making the battle easier.
Possible Risk #1: Underfunded Pension Plans
One of the biggest problems with traditional plans is that they turn out to be underfunded. This means there isn’t a sufficient amount of money available to meet the promised obligations. There are many reasons pensions can be underfunded.
One reason is that interest rates keep fluctuating. If there has been a significant loss in the stock market, it could reduce the assets of a fund. This is why a shrinking economy can have a huge impact on pension plans.
Possible Risk #2: Employer’s Bankruptcy
Another possible risk factor when it comes to receiving pensions is an employer’s bankruptcy. If you are a part of any workplace pensions and if the owner goes out of business, don’t worry yet because your pension will still be safe. However, it does not discount the possibility of things going downhill after a while. Luckily, since your pension is kept under a different trust, overseen and protected by the trustee, your funds are likely to be safe.
However, if, at any point, your employer is no longer able to pay the debt they owe, you may stop receiving contributions in the future. While a scenario like this is rare, given that the laws are there to protect pension recipients, there is still a possibility of it happening. The first way to deal with it is to contact the company that’s involved and request your compensation.
It is also possible for you to claim your compensation from the National Insurance Fund in certain circumstances. However, if you are involved in a defined benefit scheme, the Pension Protection Fund will most likely protect your amount.
Possible Risk #3: A Mis-Sold Final Salary Pension
As the name suggests, a mis-sold pension is all about transferring to a new pension product without being aware of the possible risks. Such a scheme often puts an individual’s entire pension plan at risk because they are mis-sold.
Individuals become victims when they are convinced to transfer from a defined benefit pension to something completely new. Investing in a new scheme after being misguided by an advisor is more common now than it used to be. As a result, you may potentially miss out on benefits from a reliable pension scheme.
An unreliable advisor may persuade people to be a part of high-risk investments and convince them to make pension transfers or pay using self-invested personal pensions. This way, consumers cash in their existing scheme even when it’s not a good idea to do so.
However, mis-selling, fraud and malpractice can also be dealt with effectively. One way to do so is by availing a professional’s services and using them to claim on your behalf. Another way is to file a claim yourself. Both procedures involve hard work and consistency. However, there is also a third way. This includes saving yourself from the possibility of fraud and mis-selling. Here are some ways to do so.
Keep your information updated.
If you’re working with a company, ensure they have your updated and accurate contact information. This comes in handy when you aren’t working there anymore, and the company needs a way to contact you.
Always review your records.
Never ignore a company’s annual disclosures, and make sure to have a personal copy saved in your records. You must have the right numbers written in the years of service and the salary amount. Keeping yourself informed will help you make the right decisions when it comes to your pension. For example, let’s say you work for a company like Chevron. When should you take your Chevron pension plan lump sum payment? This question is easily answered if you’ve read and understood the annual disclosures and information provided by Chevron regarding your pension.
In conclusion, there’s hardly any guarantee you’re not one of those who may never receive their pensions. If you still become victims of any faulty schemes or wrong advisors, file a complaint and get professional help as soon as possible.
